The world of cryptocurrency (crypto) offers numerous ways to earn passive income, providing opportunities for both seasoned investors and beginners. By diversifying your strategies, you can enjoy steady earnings from various crypto-related activities!
Here are seven of the best, most feasible, and most profitable ways to earn a regular passive income from crypto.
How can I earn a passive income from cryptocurrency?
1. Staking
Staking involves holding a certain amount of cryptocurrency in a wallet to support the operations of a blockchain network. In return, you receive rewards in the form of additional coins. This method is akin to earning interest on a savings account. Popular cryptocurrencies for staking include Ethereum 2.0 (ETH), Cardano (ADA), and Polkadot (DOT).
| Pros | Cons |
| Relatively low risk, supports network security, potential for high returns | Lock-up periods, subject to network performance |
How-to:
1. Staking via centralized exchanges (e.g., Binance, Coinbase)
Go to your chosen exchange (e.g., Binance or Coinbase) > Log in or create an account > Navigate to the “Earn” or “Staking” section > Select the cryptocurrency you wish to stake (e.g., ETH, SOL) > Click “Stake” or “Subscribe” > Enter the amount to stake > Confirm the staking transaction to start earning rewards.
2. Staking via non-custodial wallets (e.g., MetaMask, Trust Wallet)
Go to your non-custodial wallet application (e.g., MetaMask) > Access the staking or earn feature within the wallet > Choose the cryptocurrency to stake > Select a validator or staking pool > Enter the amount to stake > Confirm the transaction to initiate staking.
3. Liquid staking via DeFi platforms (e.g., Lido, Rocket Pool)
Go to the DeFi platform’s website (e.g., Lido or Rocket Pool) > Connect your compatible wallet > Select the cryptocurrency to stake > Enter the amount to stake > Confirm the transaction > Receive liquid staking tokens (e.g., stETH) representing your staked assets, which can be used in other DeFi activities.
2. Yield farming
Yield farming or liquidity mining, involves lending your crypto assets to decentralized finance (DeFi) platforms. In return, you earn interest or fees generated by these platforms. It requires moving funds between different DeFi protocols to maximize returns.
| Pros | Cons |
| High potential returns, multiple DeFi platforms to choose from | High risk, impermanent loss, complex for beginners |
How-to:
Go to a reputable DeFi platform (e.g., Uniswap, Curve Finance, Aave) > Connect your cryptocurrency wallet (e.g., MetaMask, Trust Wallet) > Navigate to the “Liquidity” or “Farming” section > Select a liquidity pool (e.g., ETH/USDC) > Deposit equal values of the required token pair into the pool > Receive Liquidity Provider (LP) tokens representing your share in the pool > Stake these LP tokens in the platform’s farming section > Earn rewards in the form of additional tokens or fees over time.
3. Crypto lending
Crypto lending allows you to lend your cryptocurrency to borrowers in exchange for interest payments. Platforms like BlockFi, Celsius, and Nexo offer this service. Interest rates can be quite attractive, making it a popular choice for passive income seekers.
| Pros | Cons |
| Predictable returns, various lending platforms available | Counterparty risk, potential for platform insolvency |
How-to:
Go to a reputable crypto lending platform (e.g., Aave, Compound, Binance, Crypto.com) > Create an account and complete any required identity verification (KYC) > Connect your cryptocurrency wallet (e.g., MetaMask, Trust Wallet) > Navigate to the “Lend” or “Earn” section > Select the cryptocurrency you wish to lend > Deposit the chosen amount into the platform’s lending pool > Start earning interest as borrowers take loans against your deposited assets.
4. Earning through airdrops and forks
Airdrops involve receiving free tokens from new cryptocurrency projects in exchange for holding certain tokens or participating in their ecosystem. Forks happen when a blockchain splits into two separate chains, and holders of the original cryptocurrency receive an equivalent amount of the new coin.
| Pros | Cons |
| Free tokens, potential for significant value appreciation | Requires research, may not always have significant value |
How-to:
1. Participating in airdrops
Go to reputable crypto platforms and communities (e.g., AirdropAlert, BitDegree Airdrops) > Sign up for accounts and subscribe to newsletters > Join official project channels on platforms like Discord and Telegram > Complete required tasks (e.g., following social media accounts, joining communities, or using testnets) > Connect your Web3 wallet (e.g., MetaMask) to the project > Receive airdropped tokens upon distribution.
2. Engaging in points-based airdrop systems
Go to platforms implementing points-based airdrops (e.g., EigenLayer, Blast) > Engage with the platform by performing activities like trading, providing liquidity, or participating in governance > Accumulate points based on your activities > Monitor announcements for airdrop eligibility and distribution details > Claim your tokens when the airdrop is executed.
3. Benefiting from blockchain forks
Go to official announcements from blockchain projects planning forks (e.g., Ethereum Classic from Ethereum) > Hold the original cryptocurrency in a personal wallet (not on exchanges) at the time of the fork > Ensure you have access to your private keys > Receive the new forked tokens automatically in your wallet post-fork > Access and manage the new tokens using compatible wallets or platforms.
Key points to remember:
- Always verify the authenticity of airdrop campaigns to avoid scams. Never share your private keys.
- Use reputable wallets like MetaMask, Trust Wallet, or Ledger for storing and managing your tokens.
- Stay informed by following official project channels and crypto news outlets.
5. Crypto mining
Passive income crypto mining involves using computer hardware to validate transactions and secure a blockchain network. Miners are rewarded with newly minted coins. While traditional mining requires significant investment in hardware and electricity, cloud mining allows you to rent mining power from data centers.
| Pros | Cons |
| High rewards for successful mining, cloud mining reduces the need for hardware | High upfront costs for hardware, significant energy consumption, and cloud mining scams |
How-to:
1. Solo mining
Go to a reputable hardware provider (e.g., Bitmain) > Purchase an ASIC miner suitable for your chosen cryptocurrency (e.g., Antminer S21 Pro for Bitcoin) > Set up the hardware in a well-ventilated area with stable internet and power supply > Install mining software (e.g., CGMiner, BFGMiner) > Configure the software with your wallet address and mining parameters > Start the mining process to validate transactions and earn rewards.
2. Pool mining
Go to a trusted mining pool platform (e.g., Antpool, ViaBTC) > Register an account and create a worker profile > Configure your mining hardware or software with the pool’s server details and your worker credentials > Start mining to contribute to the pool’s collective hashing power > Receive proportional rewards based on your contribution.
3. Cloud mining
Go to a reputable cloud mining service (e.g., Bitdeer, ECOS) > Sign up and choose a mining contract that fits your budget and desired cryptocurrency > Purchase the contract, which includes hash power and duration > Monitor your mining performance and earnings through the platform’s dashboard > Withdraw your earnings to your personal wallet as per the platform’s terms.
Key points to remember:
- Ensure your electricity rates are low enough to make mining profitable.
- Implement adequate cooling to prevent hardware overheating.
- Verify the legal status of crypto mining in your jurisdiction before starting.
6. Earn cryptocurrency by watching videos and performing tasks
Some platforms reward users with cryptocurrency for watching videos, completing surveys, or performing simple tasks. Websites like CoinMarketCap Earn and LBRY offer such opportunities.
| Pros | Cons |
| Easy to start, no investment required | Low earnings, time-consuming |
How-to:
A. Learn-to-Earn Platforms
Go to BitDegree Learndrops > Sign up for an account > Browse available courses on blockchain and cryptocurrency topics > Watch educational videos and complete associated quizzes > Earn crypto rewards upon successful completion of each course.
B. Microtask Platforms
- Go to JumpTask > Create an account > Navigate to the “Earn” section > Choose from tasks such as watching videos, completing surveys, or testing apps > Complete the selected tasks > Earn $JMPT tokens as rewards.
- Go to Freecash > Sign up for an account > Browse available tasks including watching videos, taking surveys, or clicking links > Complete chosen tasks > Earn cryptocurrency rewards like Bitcoin or Ethereum.
C. Video Engagement Platforms
Go to CashStar > Sign up and join the priority waitlist > Once approved, log in to your account > Perform tasks such as viewing YouTube videos, playing video games, or writing posts > Earn cryptocurrency rewards for each completed task.
7. Dividend-paying tokens
Certain tokens distribute a portion of their profits to holders, similar to traditional stock dividends. Projects like KuCoin Shares (KCS) and NEXO offer this type of passive income. These are a key reason may start investing in cryptocurrency!
| Pros | Cons |
| Regular income, potential for token value appreciation | Token value volatility, dependent on project performance |
How-to:
1. KuCoin Token (KCS)
Go to KuCoin Exchange > Create an account and complete identity verification (KYC) > Purchase KCS tokens via the trading platform > Hold KCS in your KuCoin account > Earn daily dividends from trading fees distributed to KCS holders.
2. NEO
Go to a cryptocurrency exchange that lists NEO (e.g., Binance) > Purchase NEO tokens > Transfer NEO to a wallet that supports GAS generation (e.g., NEON Wallet) > Hold NEO in your wallet > Receive GAS tokens as dividends, which can be used for transactions or traded.
3. VeChain (VET)
Go to a cryptocurrency exchange that lists VeChain (e.g., Binance) > Purchase VET tokens > Transfer VET to a wallet that supports VTHO generation > Hold VET in your wallet > Accumulate VTHO tokens as dividends, which can be used for transaction fees or traded.
Key points to remember:
- Always conduct due diligence on the project’s legitimacy and tokenomics before investing.
- Use reputable wallets that support dividend generation for the specific token.
- Monitor official channels for updates on dividend distributions and staking opportunities.
What are the risks of earning passive income from cryptocurrency?
While earning passive income from cryptocurrency can be lucrative, it’s essential to understand the inherent risks:
1. Volatility
Cryptocurrency markets are highly volatile. Prices can swing dramatically, affecting the value of your holdings and the returns on your investments. This volatility can lead to significant gains but also substantial losses.
2. Unreliability
Many crypto projects are still in their infancy, and not all will succeed. Projects may fail, leading to a complete loss of your investment. Additionally, the regulatory environment for cryptocurrencies is constantly evolving, which can impact the feasibility and legality of certain passive income strategies.
3. Security Risks
Crypto investments are susceptible to hacking and fraud. Even the most secure platforms can fall victim to cyber-attacks, potentially resulting in the loss of your assets.
4. Impermanent Loss
In yield farming, impermanent loss occurs when the value of your staked tokens changes compared to holding them outright. This can lead to lower returns or even losses, especially in volatile markets.
5. Counterparty Risk
In lending and staking, there’s always the risk that the platform or borrower defaults. Ensuring that you use reputable platforms with strong security measures is crucial to mitigate this risk.
Crypto offers a plethora of opportunities to earn passive income. By carefully choosing and diversifying your strategies, you can maximize your earnings while managing risks.
Whether you’re interested in staking, yield farming, lending, mining, or simply earning tokens through small tasks, there’s a method suited for every level of investor. Always conduct thorough research and consider the risks involved to make informed decisions and secure your financial future in the crypto space!
With over five years of experience in the tech industry, Kazim excels at simplifying complex topics, making them accessible to tech enthusiasts and general readers alike. He has contributed to several renowned publications worldwide, including WindowsReport and Allthings.how, bringing insightful coverage of key developments in the field.
When he’s not writing, you’ll find Kazim planning weekend getaways or diving into tech verticals beyond his expertise.
